A few days ago, enjoying rare sunshine and an outdoor cappuccino in the centre of Edinburgh, I watched a small one-act play run its course in the middle of the street.

A businessman parked his car, bought a ticket and then rushed off in the direction of the banks in St Andrews square. I could tell he was heading bankwards by the sheaf of cheque and pay-in books he held.

Some 26 minutes later a traffic warden inspected the ticket on his car.

It must have been a 30-minute ticket, because the warden's body language changed from "languorous saunter" to "stalking prey", and sure enough the warden returned four minutes later.

A ticket was swiftly written, the little computer's buttons pressed and the photo taken during which the owner of the car dashed up, having run over his allotted time by about two minutes. Remonstration followed but pointlessly.

The warden simply walked on. The entrepreneur (I might guess here, for the jeans and loafers, and the cost of the car, suggested that our hero was indeed an entrepreneur, but I didn't need to guess, as I recognised him) got in and drove off.

Over the dregs of my coffee I speculated how acivil servant sitting in Edinburgh's shiny new council building would have viewed this little interchange. I could almost hear the purr of pleasure: "The city has profited by £20 net of the warden's bonus and commission. A miscreant has been rightly punished."

Our disincentive scheme, aimed at reducing car journeys into the centre of Edinburgh, has made a small step forward.

That is one driver who will probably take the bus next time (oh, yes, we own the bus company!) and finally we still got the £2 the driver used to buy his ticket in the first place."

In short, our bureaucrat would say "job done", before knocking off and going down to his "comes with the job" parking bay to drive home.

Then I put myself into the mind of the entrepreneur. This particular individual owns a business (which he started) employing just shy of a hundred people, mostly located in central Edinburgh. His payroll must be somewhere in the region of £3million a year, and his business is international.

It supports a hundred households, paying about a hundred domestic rates bills at an average of £2,000 a year. On top of that the business rates bill must be in the region of £200,000 a year. The maths are easy - this individual is contributing something in the region of £400,000 a year to the city's coffers.

And today the city's minion applied a mindless piece of zero tolerance and a complete lack of common sense to an otherwise sensible rule, and in the process also publicly humiliated a human being.

Was this sensible? I am not suggesting for a moment that entrepreneurs should be exempt from parking charges (that would be nice, but impractical), but rather that the city's £20 victory is pyhrric. Imagine the entrepreneur's next strategy think session.

"Boss, we need to expand. We need to hire another 20 people with the demand that we are seeing, so we need more space."

The city would like the boss to reply, "Great.

This is such a fantastic good value city to work in, let's put them all here." But is it? How many little pinpricks does it take before the boss's reply becomes: "Great. But this is the last place I want to invest any more money - where else might be sensible? Singapore looks pretty good, or how about Dubai?"

For we now live in a truly international business world. No longer is it a no-brainer to grow your business on your doorstep - the no-brainer today is to grow your business on your customer's doorstep, and most of the interesting customers are elsewhere.

It is not even difficult to do. The mechanics of managing people across thousands of miles are now mundane and low cost, while the people themselves will also cost less as they don't have to live in a city run by grasping civil servants.

You might reasonably answer that a lot of this is idle speculation, but as I unwrapped the nice little chocolate on the saucer, I found myself benchmarking my thoughts against my own experience. My business has created five new jobs this year (so far - we are planning another three or four by Christmas). And at the same time we have transferred two jobs out of Edinburgh, and two more out of the UK completely. These transfers are permanent.

The office we rented two years ago is two-and-a-half times as large as we now need.

We rented it assuming that most of our new jobs would be located here.

We are planning to relocate two more people by the end of the year, and at least one of our new hires will be outside the UK.

When the lease ends we will be downsizing the space, I think, and the rates bill. Of our planned eight or nine new employees in 2009, we expect seven to be located outside Edinburgh. I don't think that pattern will change any time soon. Nice one, city.

'Today the city's minion applied zero tolerance and a complete lack of common sense to an otherwise sensible rule'